The federal government is planning to scale back the scope of its proposed carbon tax in the wake of concerns around Canada’s competitiveness.

A spokesperson for Minister of Environment and Climate Change Catherine McKenna confirmed to BNN Bloomberg that Ottawa will adjust the carbon tax imposed on provinces that don’t adopt a strategy that meets federal standards. The move was first reported by the Globe and Mail.

“We are engaging broadly with Canadian industry to ensure that the clean performance standards will successfully reduce emissions at the lowest cost while at the same time driving innovation and protecting Canada’s competitiveness,” the spokesperson said in an emailed statement to BNN Bloomberg.

McKenna’s office said after consulting with industry producers, the government has decided require companies to pay tax on 20 per cent of their greenhouse gas emissions – down from the 30 per cent required in its original plan – and a small number of sectors will only be taxed 10 per cent.

Ottawa unveiled the details of its national carbon pricing plan in January 2018. The government has since faced backlash, including from Ontario’s newly-elected Premier Doug Ford, who is scrapping the province’s cap-and-trade program, and Saskatchewan’s Scott Moe, who plans to challenge the carbon tax in court.

“This climb-down from the federal government is an acknowledgement of the serious economic impacts of their job-killing carbon tax,” said Rod Phillips, Ontario's minister of the environment, conservation and parks, in an emailed statement to BNN Bloomberg. 

“Our government remains opposed to any carbon tax, of any size, and is committed to using all available resources to oppose the federal government’s plan to impose a carbon tax that would increase the cost of living for the people of Ontario.”

McKenna’s spokesperson said the government expects to provide new draft regulations this fall.

“We will continue to engage with Canadian industry throughout the process of developing these regulations,” the statement read.